Freezing working-age benefits could save £4 billion but come at ‘terrible cost’

Freezing working-age benefits next year could save the Treasury more than £4 billion but at a “terrible cost” of plunging an additional 400,000 children into poverty, a think tank has warned.

In calculations published in a briefing document on Saturday, researchers at the foundation said such a decision could save Chancellor Jeremy Hunt as much as £4.2 billion in what is likely to be his final Budget in the spring before a general election.Mr Hunt is under pressure from right-wing Tory MPs to come up with tax cuts before the UK goes to the polls.

According to the Office for National Statistics, CPI in August was 6.7%, with the September rate likely to have been similar. “At a time when the incomes of the poorest half of the population are already set to fall next year, failing to uprate working-age benefits in line with prices would be hard to defend, deepening a cost of living crisis that is already hitting low and middle income households the hardest.”

Giving an example of those who could be hit worst, researchers said a working couple in receipt of Universal Credit with two children would see their annual income reduced by £1,241.

Source: Loan Digest (loandigest.net)

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